No receipts, no problem: Consulting firm paid $200K for undocumented expenses

By Paul Brennan | Iowa Watchdog

DES MOINES, Iowa — They say college is nothing like the real world.

The state university system’s Board of Regents is proving that lack of realism isn’t confined to undergraduates.

The board is paying over $200,000 in undocumented expenses to a consulting firm it hired to help it save money.

The board hired New York-based Deloitte Consulting, LLC in February to conduct an efficiency review of Iowa’s three public universities. So far Deloitte has billed the state university system $1.62 million for its services.

That figure includes $220,273 in expenses, for which no documentation has been provided.

Deloitte isn’t being negligent. Its contract with the board doesn’t require the firm to document its expenses to receive reimbursement.

Board President Bruce Rastetter assured everyone at Wednesday’s board meeting that not requiring documentation of expenses is standard practice when hiring consulting firms.

Regent Bob Downer didn’t find that reassuring.

“My feeling is that expense documentation should be provided on the same basis as members of the Board of Regents have to document expenses when requesting reimbursement,” Downer told Iowa Watchdog.

University faculty and staff also have to document expenses to be reimbursed, Downer pointed out.

“It seems to me our requirements don’t have a lot of credibility unless they’re provided across the board,” Downer said.

Downer is the only board member who has spoken out to criticize the lack of accountability in Deloitte’s contract since the Cedar Rapids Gazette broke the news about the expenses clause Tuesday.

Following the Gazette’s report, the board’s staff contacted Deloitte and the firm agreed to provide documentation in the future, it was revealed at Wednesday’s meeting. Deloitte also agreed to provide whatever documentation is still available for the $220, 273 it has already billed the university system.

In addition to those assurances, the board also received the first results of Deloitte’s review in the form of a PowerPoint presentation at the meeting.

The presentation focused on procurement procedures and claimed the state’s universities can save between $16 million and $40 million over the next two years if the procedures are streamlined.

“That’s a pretty broad range of numbers,” Downer said. “One of the board members tried to pin that down, but we couldn’t get any further information.”

“My understanding is that we’ll be getting a lot more specific information at our September and October meetings,” Downer explained.

Deloitte’s current contract only requires it to identify potential savings. For the firm to provide specific plans to implement those savings will require a new contract. It’s anticipated that contract will be negotiated and signed later this year, after Deloitte finishes its review of the university system.

The Board of Regents decided on Wednesday that future contracts will require documentation for all expenses submitted for reimbursement.

Contact Paul Brennan at pbrennan@watchdog.org